Tuesday, December 7, 2010

Poor Corporate Governance at Birla Power Solution Ltd.

Promoters sold shares in open market at high price and now buying through preferential warrant issue at lower price 


Birla Power Solutions Ltd. is issuing equity share warrants of around 21 crores  to its promoters on preferential basis at average one week market price (present market price is around Rupees 1.25) . with this promoters share holding in the company will go up to 12.76 percent (at present 4.04 percent )

As per Bombay stock exchange data  in march 2010 Promoter  share holding in the company was was at 10.02 percent and at the end of September  quarter 2010 they reduced it to 4.04 percent. in the month of march shares were quoting  at Rupees 3.50  and now present market price is at Rupees 1.25 
promoters have sold their stake at 3.50 and now they are making preferential allotment to them at around at rupee 1.25
Is this justifiable on part of promoters ? 
Is Security Exchange Board of India is watching ?

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